Prosecutors Refuse to Release Siemens FCPA Monitor Report

Prosecutors are still refusing to release Siemens monitor report.

siemens

Siemens pled guilty in 2008 to bribery charges and paid more than $1.6 billion in penalties. Siemens was implicated in corruption in Greece, Norway, Iraq, Vietnam, Italy, Israel, Argentina, Venezuela, China and Russia.

The company was required to hire a monitor – former German Finance Minister Theo Waigel – who filed a report with the court. A group of reporters has filed a lawsuit seeking access to the monitor’s report.

In a recent filing, the Department of Justice argues that the release of the monitor report “would likely cause Siemens substantial competitive harm by allowing its competitors to use its proprietary information to its commercial advantage.”

“Disclosure of confidential information about Siemens’ compliance programs would provide a free roadmap as to what works in international commerce without violating the FCPA and other anti-corruption laws, what activities to avoid, how to build an effective compliance program and system of internal controls,” the Department argued. “Release of this roadmap would allow competitors to avoid the extraordinary costs Siemens incurred in gaining the information, undercut Siemens’ efforts to deal honestly with foreign governments, and exploit any vulnerabilities in Siemens’ systems to their own advantage.”

Mike Koehler, a professor of law at Southern Illinois University School of Law, says that position is “just laughable.”

“The Department should want the Siemens monitor report in the public domain as it would be a valuable educational resource for corporate counsel and compliance professionals on a variety of topics,” Koehler says. “Siemens compliance counsel and personnel have been fixtures at numerous Foreign Corrupt Practice Act (FCPA) and related conferences to discuss the company’s compliance policies and procedures.”

The Department has argued that “the Monitor provided an important benefit to the Department of Justice and the public by boosting confidence that Siemens was implementing an effective compliance program that significantly reduced the likelihood of recidivism.”

“How is the public even capable of assessing this issue when the public is completely in the dark about what the monitor did and found?” Koehler asks.

“If the Department is all for boosting public confidence in law enforcement, there is something the Department can do,” Koehler says. “If the Department is all for providing business organizations subject to the FCPA a ‘roadmap as to what works in international commerce without violating the FCPA and other anti-corruption laws, what activities to avoid, how to build an effective compliance program and systems of internal controls’ there is something the Department can do.”

“Advocate for the release of the Siemens monitor report.”

“Yet, the Department is doing the exact opposite and I have my own suspicion as to why and it has nothing to do with the issues discussed in the Department’s briefs.”

And what would that suspicion be?

“The Department has held Siemens out as the example – in the words of the Department ‘a high standard for multi-nationals to follow.’”

“My suspicion is that the Monitor report may detail several examples of FCPA issues throughout Siemens business organization. For instance, there were serious allegations raised in 2013 by Meng-Lin Liu, a former compliance officer for Siemens in China. There were reports of improper conduct in Kuwait as well as Brazil.”

“One way to look at these numerous reports of potential improper conduct after the 2008 FCPA enforcement action is perhaps to say that Siemens is still a bad company and didn’t ‘get it.’”

“The more accurate way to look at it is that while Siemens has spent hundreds of millions of dollars of compliance, the fact remains the company has tens of thousands of employees around the world and 99% compliance still means numerous breaches of company policy.”

“My suspicion is that a Monitor report might be embarrassing for the Department given what the Department has previously said about Siemens compliance policies and procedures. If my suspicion is correct and the Monitor report details other examples of FCPA – or other anti-corruption – issues, it would force the Department to acknowledge – what all in the compliance community already know –  that compliance policies and procedures can’t eliminate all breaches, they can only reduce their likelihood.”

 

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